Executive Committee or Standing Committee?

[Tomm]

Our corporate documents include, what's called, Board Policies which are not defined as being either special rules of order or standing rules.

BP-7 titled: The Bid Review & Approval Commission which is made-up of only 4 directors (9 directors make-up the entire board)

a. Reviews bids for Preservation and Improvement Fund (“PIF”) Projects, Capital projects and Repair & Maintenance projects with a value of $25,000 or more.

b. Approves, by signing the disposition of all bids for Preservation and Improvement projects, Capital projects and Repair & Maintenance projects with a value of $25,000 or more on behalf of the Board of Directors. In the absence of a member of the Commission, another Director may sign on their behalf. (emphasis added)

 

Question: It seems to me that this is an Executive Committee, however, no authorization for an Executive Committee is stated in the Bylaws. Is this type of committee/commission allowed within RONR?

 

A different BP, a portion of which is titled:  Projects funded from the Preservation and Improvement Fund (PIF)must:

1. be approved by the Board of Directors; (emphasis added)

2. be a minimum of Three Hundred Thousand Dollars ($300,000); and 

3. have a depreciable life of at least fifteen (15) years.

 

Question: Seems to be a conflict between the two BP's. Can only a portion of the Board determine the finality of a decision or must it seek final approval from the entire board ( 49:13, 56:41) 

 

[Joshua Katz]

As I understand it, one policy (which is a lower level of rule than the bylaws, and appears to have been adopted by the board) allows for a subset of the board to approve certain projects, while another policy requires such projects be approved by the board. Which prevails is going to depend in part on whether each, or either, is valid. So it's going to require assessing whether the board has the authority to approve those projects and, if so, whether it has the authority to delegate its power to a subset of itself.

[Josh Martin]

On 7/19/2023 at 12:20 PM, Tomm said:

BP-7 titled: The Bid Review & Approval Commission which is made-up of only 4 directors (9 directors make-up the entire board)

a. Reviews bids for Preservation and Improvement Fund (“PIF”) Projects, Capital projects and Repair & Maintenance projects with a value of $25,000 or more.

b. Approves, by signing the disposition of all bids for Preservation and Improvement projects, Capital projects and Repair & Maintenance projects with a value of $25,000 or more on behalf of the Board of Directors. In the absence of a member of the Commission, another Director may sign on their behalf. (emphasis added)

 

Question: It seems to me that this is an Executive Committee, however, no authorization for an Executive Committee is stated in the Bylaws. Is this type of committee/commission allowed within RONR?

I do not agree that this seems to be an "Executive Committee," which is a "board within a board."

"In a society where the board is large or its members must travel from a distance to meet, it is usual for the bylaws to establish an executive committee composed of a specified number of board members, which shall have all or much of the power of the board between meetings (just as the board has all or much of the power of the society between the society's meetings), but which cannot alter any decision made by the board (just as the board cannot alter any decision made by the society). The executive committee is thus in reality a “board within a board” and operates under the rules in this book applicable to boards rather than those applicable to committees." RONR (12th ed.) 49:13

An Executive Committee is given broad, general powers to act on behalf of the board, in much the same manner that the Board of Directors is given broad, general powers to act on behalf of the society. This committee (which the board has labeled a "commission") has control over matters in a specific subject area - specifically, preservation and improvement fund projects, capital projects, and repair and maintenance projects. That is more consistent with the common understanding of a committee, not a board.

"A committee, as understood in parliamentary law, is a body of one or more persons, elected or appointed by (or by direction of) an assembly or society, to consider, investigate, or take action on certain matters or subjects, or to do all of these things. Unlike a board, a committee is not itself considered to be a form of assembly." RONR (12th ed.) 50:1

Notwithstanding this, there are perhaps other issues with creating a committee of this nature, since the rules appear to delegate authority to the committee.

"As a general principle, a board cannot delegate its authority—that is, it cannot empower a subordinate group to act independently in its name—except as may be authorized by the bylaws (of the society) or other instrument under which the board is constituted; but any board can appoint committees to work under its supervision or according to its specific instructions. Such committees of the board always report to the board." RONR (12th ed.) 49:12

While I think it goes too far to call this committee an "Executive Committee," there is no doubt that this is still a committee which the board has empowered "to act independently in its name." The board is not empowered to create such committees unless the board is so authorized in the bylaws. So you will have to check whether the bylaws authorize the board to do so.

As I recall, however, the board has the authority to amend the bylaws, so in the event the bylaws do not currently contain such a provision, the board can fairly easily resolve this problem by amending the bylaws to authorize the board to delegate its authority in this manner.

On 7/19/2023 at 12:20 PM, Tomm said:

Question: It seems to me that this is an Executive Committee, however, no authorization for an Executive Committee is stated in the Bylaws. Is this type of committee/commission allowed within RONR?

 

A different BP, a portion of which is titled:  Projects funded from the Preservation and Improvement Fund (PIF)must:

1. be approved by the Board of Directors; (emphasis added)

2. be a minimum of Three Hundred Thousand Dollars ($300,000); and 

3. have a depreciable life of at least fifteen (15) years.

 

Question: Seems to be a conflict between the two BP's. Can only a portion of the Board determine the finality of a decision or must it seek final approval from the entire board ( 49:13, 56:41) 

It will ultimately be up to the board to interpret its own rules, but it would seem to me that, in so far as the policies are concerned, the committee in question is authorized to approve bids for Capital projects and Repair & Maintenance projects, but PIF projects must be approved by the board. It may be beneficial to amend the policies for clarity.